Nearly 7 million Californians lacked enough resources to afford basic necessities in 2025
September 16, 2026 - SACRAMENTO, CA — California’s poverty rate remains essentially unchanged at 17.3% in 2025, among the highest in the nation, according to a new analysis of Census data released on Tuesday by the California Budget & Policy Center (Budget Center). The data shows that widespread economic hardship has returned to (and exceeded) pre-pandemic levels, even before major federal cuts to food assistance, health care, and other essential services take effect.
“Despite living in one of the world’s more prosperous economies, millions of Californians are struggling to keep up with rising costs and afford things like food and housing,” said Monica Saucedo, senior policy fellow at the California Budget & Policy Center. “We saw how quickly poverty can fall when public investments help families secure basic needs. The latest data shows that temporary investments helped temporarily lift Californians out of poverty, but far more sustained action is needed to reduce poverty and help families achieve economic security.”
An estimated nearly 7 million Californians lacked the resources to afford basic necessities like food and housing in 2025. The Budget Center’s analysis uses the Supplemental Poverty Measure, which provides a more comprehensive picture of families’ economic well-being by accounting for differences in the cost of living, the cost of basic needs, and resources provided through public supports.
The Budget Center’s analysis uses the Supplemental Poverty Measure, which accounts for differences in cost of living and both the cost of basic needs and resources provided through public supports to provide a more comprehensive picture of families’ economic well-being.
California’s poverty rate fell sharply in 2021 following significant, but temporary, investments in the child tax credit, food assistance, and other anti-poverty programs. But as those investments ended, poverty drastically rose across all groups.
Key findings include:
- Child poverty has more than doubled since 2021, rising from 7.5% to 16.6% in 2025.
- Poverty remains highest among older adults, at 21.5%. High out-of-pocket medical expenses contribute to higher poverty among older Californians, with recent cuts putting them at greater risk.
- Poverty among working-age adults has increased significantly, rising from 11.1% in 2021 to 16.3% in 2025 among Californians ages 18 to 64.
- Poverty increased across every racial and ethnic group, with the largest increases among Black and Latinx Californians.
The 2025 data also provides an important baseline for understanding the effects of recent federal policy changes enacted by Congress in the “One Big Beautiful Bill.” But because many of these changes have not yet taken full effect, the 2025 poverty estimates do not reflect their impacts. As cuts to food assistance, health coverage, and other public supports take effect in the coming years, poverty and economic hardship could rise further.
“These findings should shock our conscience, but they are sadly predictable. What’s more, the number of Californians living in poverty is climbing even higher because of the systematic and deliberate dismantling of safety net programs and healthcare at the federal level. Although California has adopted important initiatives to help low-income families and children, this data confirms that far more is needed,” said Shimica Gaskins, president and CEO of End Child Poverty California powered by GRACE and California Budget & Policy Center board member. “The hardships facing millions upon millions of Californians call for bold, proven solutions to invest in vulnerable populations, address the economic disparities that disproportionately impact diverse populations, and close loopholes so that the wealthiest corporations and individuals pay their fair share. It is long past time for our leaders to make it the top priority without exception that all California children, families, and individuals have the opportunity to live with health and dignity.”
California has options to reduce poverty and mitigate the incoming harm of federal cuts, including raising additional ongoing revenue in order to make investments that help Californians meet their basic needs. California is estimated to spend more than $9 million on tax breaks for corporations in the 2026-27 fiscal year — nearly six times more than the state spends on refundable tax credits for Californians with low incomes. Closing costly corporate tax breaks and expanding investments that directly support Californians with low incomes could strengthen economic security as the federal safety net weakens.
Read the full analysis HERE
About the California Budget & Policy Center: The California Budget & Policy Center (Budget Center) is a nonpartisan research and analysis nonprofit advancing public policies that expand opportunities and promote well-being for all Californians.
Source: California Budget & Policy Center